Detroit Water Charged with Price Gouging

Metro Detroit residents served by the Detroit Water and Sewerage Department should demand a multimillion-dollar refund for overcharges, according to Oakland County Drain Commissioner John McCulloch.

A $70,000 study McCulloch commissioned early this year found that, over the past two years, Detroit had overcharged 30 Oakland County communities about $13 million for water and sewer services.

"If you look at the impact to the entire region the numbers would be staggering," McCulloch told the Detroit Free Press Tuesday. "The $13 million is just for the communities I represent in Oakland County. It doesn't include all the other communities throughout the region that are served by Detroit."

Suburban Warren officials supported McCulloch's position, citing a study they commissioned in May finding Warren was overcharged by $1.75 million since 2000.

Detroit's double-talk is dead," Warren City Attorney George Constance told the Detroit Free Press. "We now have scientific evidence pointing to a systematic abuse of suburban customers."

George Ellenwood, spokesman for Detroit water chief Victor Mercado, said the water department is reviewing the Oakland County report.

"We don't feel that we are improperly charging them," Ellenwood said. "This is a study that draws conclusions, and it is only that. What is important is that we work with our customers to address their concerns, and we are fully prepared to do that."

The only things leaders in Oakland County and Warren want Detroit Water to address are their concerns about a prompt refund.

Warren officials said their study by Raftelis Financial Consultants in Kansas City, Mo. — the same firm that did Oakland County's study — will support their lawsuit filed in October 2002 against Detroit for alleged overcharges. The case is pending before U.S. District Judge John Feikens. Feikens also oversees the Detroit water system.

The heated battle between Detroit and the suburbs over water and sewer rates reached a boiling point in 2001, when Detroit Water announced rate increases of 15 to 30 percent. The following year, residents saw a 9 percent average increase throughout the service area.

Warren leaders, as well as others across the region, have claimed for years that Detroit is charging residents unfairly for an inefficient department that has failed to collect millions of dollars in unpaid water bills in the city.

Detroit Free Press

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